intellectual property contribution and assignment agreement

This intellectual property agreement  is between , an individual a(n) (the " Assignor ") and  , an individual a(n) (the " Assignee ").

The Assignor has full interest in the intellectual property listed in Exhibit A and described in section 1 below.

The Assignor wishes to transfer to the Assignee, and the Assignee wishes to purchase and receive from the Assignor, all of its interest in the Intellectual Property.

The parties therefore agree as follows:

1. ASSIGNMENT OF INTELLECTUAL PROPERTY.

The Assignor assigns to the Assignee, and the Assignee accepts the assignment of, all of the Assignor's interest in the following in the United States and its territories and throughout the world:

• (a) the intellectual property rights related to the intellectual property listed in Exhibit A ;
• (b) all precursors, portions, and works in progress with respect to that intellectual property and all inventions, works of authorship, mask works, technology, information, know-how, materials, and tools relating to those or to the development, support, or maintenance of those;
• (c) all copyrights, patent rights, trade dress, trade names, business names, other indicia of origin, trade secret rights, trademark rights, mask works rights, and all other intellectual property rights and all business, contract rights, and goodwill in, incorporated, or embodied in, used to develop, or related to any of those; and
• (d) the registrations and applications for registrations of the foregoing (collectively, the" Intellectual Property ").

2. PURCHASE PRICE.

The Assignee shall pay the Assignor a flat fee of $ as full payment for all rights granted under this agreement. The Assignee shall complete this payment no later than .

3. RECORDATION.  

In order to record this assignment with all relevant government agencies, within hours of the effective date of this assignment, the parties shall sign the form of intellectual property assignment agreement attached as Exhibit B . The is solely responsible for filing the assignment and paying any associated fees of the transfer.

4. NO EARLY ASSIGNMENT.

The Assignee shall not assign or otherwise encumber its interest in the Intellectual Property or any associated registrations until it has paid to the Assignor the full consideration provided for in this assignment. Any assignment or encumbrance contrary to this provision shall be void.

5. ASSIGNOR'S REPRESENTATIONS.

The Assignor hereby represents and warrants to the Assignee that it:

• (a) is the sole owner of all interest in the Intellectual Property;
• (b) has not transferred, exclusively licensed, or encumbered any Intellectual Property or agreed to do so;
• (c) is not aware of any violation, infringement, or misappropriation of any third party's rights (or any claim of those) by the Intellectual Property;
• (d) is not aware of any third-party consents, assignments, or licenses that are necessary to perform under this assignment;
• (e) was not acting within the scope of employment of any third party when conceiving, creating, or otherwise performing any activity with respect to any item of Intellectual Property.

The Assignor shall immediately notify the Assignee in writing if any facts or circumstances arise that would make any of the representations in this assignment inaccurate.

6. INDEMNIFICATION. The Assignor shall indemnify the Assignee against:

• (a) any claim by a third party that the Intellectual Property or its use, manufacture, sale, distribution, or reproduction infringes on or misappropriates any copyrights, trade secrets, patents, or other intellectual property;
• (b) any claim by a third party that this assignment conflicts with, violates, or breaches any contract, assignment, license, sublicense, security interest, encumbrance, or other obligation to which the Assignor is a party or of which it has knowledge;
• (c) any claim relating to any past, present, or future use, licensing, sublicensing, distribution, marketing, disclosure, or commercialization of any of the Intellectual Property by the Assignor; and
• (i) the Assignee promptly notifies the Assignor of that claim;
• (ii) the Assignor controls the defense and settlement of that claim;
• (iii) the Assignee fully cooperates with the Assignor in connection with its defense and settlement of that claim; and
• (iv) the Assignee stops all sales, distribution, and public use of the infringing Intellectual Property, if requested by the Assignor.
• (i) obtain the right for the Assignee to continue to use the infringing Intellectual Property;
• (ii) modify the infringing Intellectual Property to eliminate the infringement;
• (iii) provide substitute noninfringing intellectual property to the Assignee pursuant to this assignment; or
• (iv) refund to the Assignee the amount paid under this assignment for the infringing Intellectual Property.
• (c) No Other Obligations. The Assignor shall have no other obligations or liability if infringement occurs, and shall have no other obligation of indemnification or to defend relating to infringement. The Assignor shall not be liable for any costs or expenses incurred without its prior written authorization and shall have no obligation of indemnification or any liability if the infringement is based on (i) any modified form of the Intellectual Property not made by the Assignor, (ii) any finding or ruling after the effective date of this assignment, or (iii) the laws of any country other than the United States of America or its states.

7. GOVERNING LAW.

• (a) Choice of Law. The laws of the state of  govern this agreement (without giving effect to its conflicts of law principles).
• (b) Choice of Forum. Both parties consent to the personal jurisdiction of the state and federal courts in County, .

8. AMENDMENTS.

No amendment to this assignment will be effective unless it is in writing and signed by a party or its authorized representative.

9. ASSIGNMENT AND DELEGATION.

• (a) No Assignment. Neither party may assign any of its rights under this assignment, except with the prior written consent of the other party. All voluntary assignments of rights are limited by this subsection.
• (b) No Delegation. Neither party may delegate any performance under this assignment, except with the prior written consent of the other party.
• (c) Enforceability of an Assignment or Delegation. If a purported assignment or purported delegation is made in violation of this section, it is void.

10. COUNTERPARTS; ELECTRONIC SIGNATURES.

• (a) Counterparts. The parties may execute this assignment in any number of counterparts, each of which is an original but all of which constitute one and the same instrument.
• (b) Electronic Signatures. This assignment, agreements ancillary to this assignment, and related documents entered into in connection with this assignment are signed when a party's signature is delivered by facsimile, email, or other electronic medium. These signatures must be treated in all respects as having the same force and effect as original signatures.

11. SEVERABILITY.

If any one or more of the provisions contained in this assignment is, for any reason, held to be invalid, illegal, or unenforceable in any respect, that invalidity, illegality, or unenforceability will not affect any other provisions of this assignment, but this assignment will be construed as if those invalid, illegal, or unenforceable provisions had never been contained in it, unless the deletion of those provisions would result in such a material change so as to cause completion of the transactions contemplated by this assignment to be unreasonable.

12. NOTICES.

• (a) Writing; Permitted Delivery Methods. Each party giving or making any notice, request, demand, or other communication required or permitted by this agreement shall give that notice in writing and use one of the following types of delivery, each of which is a writing for purposes of this agreement: personal delivery, mail (registered or certified mail, postage prepaid, return-receipt requested), nationally recognized overnight courier (fees prepaid), facsimile, or email.
• (b) Addresses. A party shall address notices under this section to a party at the following addresses:
• If to the Assignor: 
• If to the Assignee: 
• (c) Effectiveness. A notice is effective only if the party giving notice complies with subsections (a) and (b) and if the recipient receives the notice.

13. WAIVER.

No waiver of a breach, failure of any condition, or any right or remedy contained in or granted by the provisions of this assignment will be effective unless it is in writing and signed by the party waiving the breach, failure, right, or remedy. No waiver of any breach, failure, right, or remedy will be deemed a waiver of any other breach, failure, right, or remedy, whether or not similar, and no waiver will constitute a continuing waiver, unless the writing so specifies.

14. ENTIRE AGREEMENT.

This assignment constitutes the final agreement of the parties. It is the complete and exclusive expression of the parties' agreement about the subject matter of this assignment. All prior and contemporaneous communications, negotiations, and agreements between the parties relating to the subject matter of this assignment are expressly merged into and superseded by this assignment. The provisions of this assignment may not be explained, supplemented, or qualified by evidence of trade usage or a prior course of dealings. Neither party was induced to enter this assignment by, and neither party is relying on, any statement, representation, warranty, or agreement of the other party except those set forth expressly in this assignment. Except as set forth expressly in this assignment, there are no conditions precedent to this assignment's effectiveness.

15. HEADINGS.

The descriptive headings of the sections and subsections of this assignment are for convenience only, and do not affect this assignment's construction or interpretation.

16. EFFECTIVENESS.

This assignment will become effective when all parties have signed it. The date this assignment is signed by the last party to sign it (as indicated by the date associated with that party's signature) will be deemed the date of this assignment.

17. NECESSARY ACTS; FURTHER ASSURANCES.

Each party shall use all reasonable efforts to take, or cause to betaken, all actions necessary or desirable to consummate and make effective the transactions this assignment contemplates or to evidence or carry out the intent and purposes of this assignment.

[SIGNATURE PAGE FOLLOWS]

Each party is signing this agreement on the date stated opposite that party's signature. 

[PAGE BREAK HERE] EXHIBIT A LIST OF INTELLECTUAL PROPERTY

[PAGE BREAK HERE] EXHIBIT B FORM OF RECORDABLE INTELLECTUAL PROPERTY ASSIGNMENT For good and valuable consideration, the receipt of which is hereby acknowledged, an individual a(n) (the " Assignor ") hereby assigns to an individual a(n) (the " Assignee ") all of the Assignor's interest in the Intellectual Property identified in Attachment A to this assignment, and the Assignee accepts this assignment.

Each party is signing this agreement on the date stated opposite that party's signature.

[PAGE BREAK HERE]

ATTACHMENT A INTELLECTUAL PROPERTY

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Intellectual property assignment agreement: How-to guide

In the dynamic realm of commerce and innovation, the notion of property extends far beyond physical boundaries. Just as one might transfer ownership of a house or a car, the exchange of intellectual property (IP) rights is a critical component of modern business transactions. For instance, if you're launching a startup, acquiring product rights, or even purchasing an entire company, in each scenario, the seamless transfer of intellectual property ownership is essential for ensuring a smooth transition and protecting your interests.

So what constitutes intellectual property? Intellectual property encompasses creations of the mind, such as inventions, software, and hardware programs, literary and artistic works, designs, symbols, names, and images. As businesses grow and evolve, the need to manage and protect these valuable assets becomes increasingly important. One crucial aspect of managing intellectual property is through intellectual property assignment agreement, otherwise known as IP assignment agreement. These agreements facilitate the transfer of IP rights from one part to another.

In this article, we’ll explore the nuances of intellectual property assignment agreements, including their definitions, benefits, types, and considerations.

What is an intellectual property assignment agreement?

An intellectual property assignment agreement, also known as an IP assignment agreement, is a written contract that transfers intellectual property rights from one party (the assignor) to another (the assignee). Intellectual property covers a broad spectrum of intangible assets, including patents, copyrights, trademarks, trade secrets, and more.

For instance, a software developer might have created a groundbreaking algorithm while employed at the company. Through an IP assignment agreement, the developer transfers the rights to this algorithm to the employer, ensuring that the company has exclusive ownership and control over its use and commercialization.

Benefits of IP assignment agreement

IP assignment agreements are crucial in a company’s business and provide multiple benefits for the assignor and assignee.

Clear ownership

By executing an IP assignment agreement, the assignor unequivocally transfers all rights and interests in the intellectual property to the assignee. This clarity of ownership and proprietary rights helps to avoid disputes and potential litigation over the ownership of the IP in the future.

Legal protection

By formally transferring the IP rights through a written agreement, both parties are legally protected. This protection can be essential in case of any infringement or misuse of intellectual property.

Assured compensation or price guarantee

When transferring IP ownership rights for patents, trademarks, copyrights, etc., the original owner gets compensated by the party buying the ownership. The buyer will also pay the IP owner an agreed-upon price for the IP, which will be paid on the date as decided by the involved parties.

No future obligations

The party selling the IP won’t be responsible for meeting any future obligations. For instance, if there is an existing trademark that requires constant monitoring to know whether the trademark is used by any other competitors, the seller won't bear the charges incurred for  trademark monitoring . The buyer has to bear these and any future trademark maintenance costs.

Commercialization opportunities

Assigning intellectual property rights can enable businesses to commercialize the intellectual property more effectively. This could involve licensing the IP to third parties, selling it outright, or using it as collateral for financing.

Facilitates collaboration

In cases where multiple parties are involved in creating intellectual property, an assignment agreement can facilitate collaboration by clearly defining each party's rights and responsibilities.

Risk mitigation

For businesses acquiring ownership rights to intellectual property, an assignment agreement mitigates the risk of third parties claiming rights to the IP. It provides a legal basis for defending against infringement claims and protects the assignee's investment in the IP.

Enhanced value

Clear ownership of intellectual property assets can enhance the value of a business, especially during mergers, acquisitions, or fundraising activities. Investors and stakeholders are more likely to perceive a business positively when it has secure ownership of valuable IP assets. For example, let’s say your start-up company holds sole intellectual property rights to an automatic house-locking system. When your company gets acquired by another company, the new company will also evaluate the value of the IP owned.

Understanding IP assignment agreements: Considerations for sellers

While intellectual property assignment agreements offer various benefits, as a seller of the IP you need to keep in mind what it entails for you when you sell your IP.

Choosing between an IP assignment and a licensing agreement

In an IP assignment agreement, the seller transfers all ownership rights to the intellectual property for a predetermined fee. Here the seller gets a fair market value for their IP as a one-time payment. However, if they had opted for an  IP licensing arrangement , they could have retained the ownership of their IP while giving certain usage rights to the interested party. For instance, let’s say you have written and composed a song. A music company wants your song under their label. Here you have two options. You can sell your song completely to the music label, where they’ll have the right to use or alter your song as they deem fit. Or you can license your creation for an agreed-upon fee or price and set the terms and conditions for using your song. Here you’re getting paid for your creation while retaining ownership of your creation. Whichever option works best for you can be opted and respective agreements can be drawn. 

Value uncertainty

The value of intellectual property can fluctuate over time due to changes in market demand, technological advancements, or legal developments. Sometimes an intellectual property’s future value can increase tremendously, impacting the fairness of the negotiated price. Hence, while deciding the price of such assets, the seller should calculate the future valuation and decide the price of IP.

Limited future opportunities

Once intellectual property rights are assigned, the assignor may be restricted from using or further developing the intellectual property in the future. This limitation could hinder the assignor's ability to explore new business ventures or pivot their existing strategies.

In conclusion, while an intellectual property assignment agreement offers significant benefits in terms of clarity, protection, and commercialization of intellectual property assets, parties must carefully weigh these advantages against the limitations. Consulting with legal professionals experienced in intellectual property law is essential to navigate these considerations effectively.

What are the types of IP assignment agreements?

Intellectual property assignment agreements are comprehensive in nature, outlining the terms and conditions under which the transfer of IP ownership occurs. Here's an overview of the types of IP assignment agreements:

Patent assignment agreement or assignment of patents

A  patent assignment agreement  is a written agreement whereby the owner of a patent transfers or assigns their ownership rights to the other party. This agreement ensures that the assignee gains full legal rights to the patent, including the right to exclude others from making, using, or selling the patented invention, innovations, and processes. Patent assignment agreements typically include details about the patented invention, including patent numbers, descriptions, and any related rights or obligations.

Copyright assignment agreement or assignment of copyrights

Copyright assignment agreements  transfer ownership of creative works, such as literary works, music, art, and other creative expressions. By signing a copyright assignment agreement, the creator relinquishes their rights to reproduce, distribute, and display the copyrighted work to the assignee.

Trademark assignment agreement or assignment of trademarks

Trademark assignment agreement s  transfer ownership of trademarks, which are used to identify and distinguish goods or services in the marketplace. Through this agreement, the assignor relinquishes their exclusive rights to use the trademark in commerce, allowing the assignee to use and enforce the mark for their business or products.

Trade secret assignment agreement or assignment of trade secrets

Trade secret assignment agreements are used to transfer ownership of confidential information or trade secrets from one party to another. These agreements outline the specific trade secrets being transferred and impose obligations of confidentiality on the assignee to protect the secrecy of the information.

By signing such an agreement, the assignee gains the rights to use and protect the trade secrets for their own benefit. It can be any proprietary information like formulas, processes, customer lists, and business strategies. These agreements typically include provisions to maintain confidentiality and prevent unauthorized disclosure or use of trade secrets.

Design assignment agreement or assignment of design

An assignment of design agreement involves the transfer of ownership rights related to industrial designs or product designs. It ensures that the assignee gains exclusive rights to reproduce, distribute, and modify the design according to their business needs. This agreement is crucial for companies involved in product development and manufacturing.

Employee or contractor IP assignment agreement

These agreements transfer ownership of intellectual property created by employees or contractors during their employment or engagement. They are essential for employers to secure ownership of IP developed by their personnel. They often include provisions related to confidentiality, non-competition, and non-disclosure, which are mostly included in an employment agreement. Sometimes, employers even ask employees to sign separate non-disclosure agreements whenever an employee comes up with an invention. 

Assignment of IP in a joint venture 

In cases where multiple parties jointly create intellectual property, a joint ownership agreement may establish each party's rights and responsibilities. These agreements detail the terms of joint ownership, including each party's share of the IP, decision-making authority, and rights to exploit the IP.

It's essential to choose the appropriate type of IP assignment agreement based on the specific intellectual property rights being transferred and the circumstances of the transaction. Consulting with legal professionals knowledgeable in intellectual property law can help ensure that the agreement adequately protects the interests of all parties involved.

Who uses intellectual property assignment agreements?

IP assignment agreements are utilized across a spectrum of industries and scenarios. These agreements are crucial tools for businesses and individuals seeking to define and transfer intellectual property rights.

Corporations and businesses

Employment agreement : Companies frequently incorporate IP assignment clauses into their employment contracts. This ensures that any intellectual property created by employees during the course of their employment is automatically assigned to the company.

Consulting agreement : Similar to employment agreements, consulting contracts may include provisions requiring consultants to transfer any intellectual property they develop while working for the company.

Transactions contemplated : In mergers, acquisitions, or other business transactions, IP assignment agreements are employed to transfer ownership of intellectual property assets between parties.

Joint ventures : Partners in joint ventures often use these agreements to clarify ownership rights and facilitate the sharing or licensing of intellectual property developed during the collaboration.

Individuals and inventors

Prior inventions : An individual with a prior invention may use IP assignment agreements to transfer ownership rights to a new employer or business partner.

Consultants and contractors : Freelancers, consultants, and independent contractors may be required to sign an IP or invention assignment agreement as part of their contractual arrangement with clients.

Startups : Startup founders commonly use these agreements to consolidate ownership of intellectual property created before or during the company's establishment.

In essence, assignment agreements are utilized by parties across various sectors and contexts to facilitate the transfer of valuable intellectual property rights, ensuring legal protection and compliance while fostering innovation and business growth.

Key provisions of an intellectual property assignment agreement

Introduction.

Begin the agreement by formally introducing the parties involved to the agreement. In an intellectual property assignment agreement, the party selling the IP is called the “assignor,” and the other party who buys it is called the “assignee.” Here, along with providing the details of the intellectual property, the assignor explicitly agrees to transfer intellectual property rights to the assignee according to the agreed-upon terms of the agreement.

Assignment of IP

This section specifies the intellectual property being transferred. It identifies the specific patents, trademarks, copyrights, trade secrets, or other intellectual property referenced in the agreement. Additionally, it outlines the scope of the transfer and any limitations on the assigned IP rights.

Purchase price

The agreement details any monetary compensation involved in the transfer of intellectual property rights. In this section, clearly outline the payment terms of the agreement. Detail whether the parties hereto agree to pay the assignor as a lump sum or in installments. If the payment is made in installments, you must also provide the schedule for such payment.

Recordation

To formalize the transfer of intellectual property rights, recordation with relevant authorities may be necessary. This provision addresses the requirement and process for recording the assignment with the appropriate governmental authority, ensuring compliance with legal formalities.

No early assignment

This clause states that the assignment of IP rights cannot occur before certain conditions are met, such as before the completion of a project or the fulfillment of payment obligations. This section prevents premature transfers of IP.

Assignor’s representations

In this part, the assignor provides assurance that they have the sole right to the IP created and it hasn’t been licensed to any third-parties. They also affirm that they have the legal authority to transfer ownership of the IP and there are no undisclosed encumbrances or infringements.

Indemnification

This provision outlines the parties' obligations to indemnify each other against any losses, damages, or liabilities arising from a breach of the agreement or the assertion of third-party claims related to the transferred IP.

Governing law

This section specifies the jurisdiction whose laws will govern and interpret the agreement. It provides clarity in the event of legal disputes.

This clause outlines the procedures for making changes or modifications to the intellectual property assignment agreement. To make any changes pertaining to the terms of the agreement requires written consent from both parties.

Assignment and delegation

This provision addresses the transferability of rights and obligations under the IP assignment agreement. They stipulate whether parties can assign their rights or delegate their duties to third parties.

Counterparts; electronic signatures

This section permits the IP assignment agreement to be executed in multiple counterparts, facilitating convenience in signing. It also recognizes the legal validity of electronic signatures, ensuring compliance with modern technological practices.

Severability

The severability clause states that if any provision of the agreement is found to be invalid or unenforceable, the remaining provisions will remain in full force and effect. This ensures that the invalidity of one provision does not invalidate the entire agreement.

This provision details the methods and addresses for official communication between the parties regarding the intellectual property assignment agreement. They ensure that important correspondence is properly delivered and acknowledged.

Waiver provision addresses instances where a party chooses not to enforce its rights under the agreement. For instance, if certain provisions are waived off on a one-time basis regarding the agreement, this doesn’t mean that the provision is waived for the entire term of the agreement. Take the case where the assignee is paying for the IP in installments. If the assignee is not able to pay the installment for a month, then the assignor can waive that default and continue the agreement upon prior written consent.

Entire agreement

This part of an intellectual property assignment agreement explains that the parties agree to the specific terms and conditions mentioned in the agreement. Any verbal negotiations or other terms that are even stated via email or otherwise are not part of this agreement.

This section states that the headings used in the agreement are for convenience only and do not affect the interpretation of the provisions.

Effectiveness

The effectiveness provision specifies the date on which the agreement becomes effective. This ensures clarity regarding when the rights and obligations outlined in the agreement take effect.

Necessary acts; further assurances

Requires the parties to take any additional actions necessary to carry out the terms of the agreement fully. This may include signing additional documents or cooperating with each other as needed.

How does an online template facilitate drafting intellectual property assignment agreements?

There are various advantages of using an online template for IP such as.

Simplified drafting process

Online templates streamline the drafting process of IP assignment agreements. By providing a structured framework, these templates guide users through the essential elements required for such agreements. Users can efficiently input pertinent details specific to their arrangement, ensuring comprehensive coverage of the subject matter assigned.

Ease of customization

Some  online template providers, like LegalZoom , allow you to easily customize the templates to suit specific circumstances. With editing options available, users can modify clauses and provisions to reflect their agreed-upon terms and conditions of the arrangement

Clarity and consistency

These templates offer clear and standardized language, enhancing understanding and minimizing ambiguity. Consistent formatting and terminology throughout the agreement contribute to its readability and effectiveness.

Time and cost efficiency

Utilizing an online template can minimize the need for extensive document research and costly legal consultations. It allows parties to draft a comprehensive IP assignment agreement efficiently and affordably, saving valuable time and resources.

Accessibility and convenience

Online templates are readily accessible from anywhere with an internet connection, enabling parties to initiate and complete the drafting process conveniently. This accessibility promotes collaboration and facilitates the timely execution of agreements.

As you can see, using online templates provides numerous benefits. Since there are a multitude of templates available online, choosing the right template is key. To streamline this process, LegalZoom offers a comprehensive intellectual property assignment agreement template that is simple and easy to use. Just answer the guided questions, complete the form, and download the document for free.

Frequently asked questions

What's an intellectual property assignment agreement.

When your business needs to sell or buy intangible assets, use an intellectual property assignment agreement to protect both parties. It enables the transfer of ownership of intangible items legally. Intellectual property includes everything from patents to trademarks to software and more.

What key details are required to complete your assignment agreement?

Here's the information you'll need to complete your intellectual property assignment agreement:

• Who owns the intellectual property : Keep the information of the assignor ready while drafting your agreements
• Who's buying the intellectual property : Have the name and contact details of the assignee ready
• How much it costs : Know what the buyer pays for the intellectual property

Free Intellectual Property Assignment Agreement Template

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Intellectual Property Assignment Agreement

Nov 2, 2022

An intellectual property assignment agreement is an agreement to transfer intellectual property from one person or company to another.

What is an Intellectual Property Assignment Agreement?

An intellectual property assignment agreement is an agreement to transfer intellectual property from one person or company to another. The agreement may also be referred to as an intellectual property transfer agreement, an IP assignment agreement or an IP transfer agreement.

When should you use an Intellectual Property Assignment Agreement?

An intellectual property assignment agreement should be used whenever transferring the rights in intellectual property ( IP ). There are a number of situations where you may need to do this. The most common for SMEs is where an individual has done work for a company as a consultant without using a consultancy agreement with the result that the consultant and not the company, owns the IP in the work. It is also necessary to transfer IP where founders create IP before incorporating or being employed by a company and, as a result, title to the IP vests in the founder.  

Why is an Intellectual Property Assignment Agreement important and why should you use it?

Investors in early stage companies will often require the company and key employees to give warranties confirming that the company owns all material IP used by the company. Any IP not owned by the company will need to be transferred to the company before the investment is completed. Failing to transfer the IP can materially impact the valuation of the company or, in extreme cases, lead investors to pull out of the transaction.

It is necessary to use a written agreement for an assignment of certain types of IP (such as copyright) to be effective. Further, it is important to ensure that the agreement is an enforceable contract. For the contract to be enforceable there must be some form of consideration paid in exchange for the IP. The amount of consideration payable will depend on the situation in which the IP is being transferred. If a consultant or founder is transferring IP that should have been owned by the company, the consideration should be a nominal amount, e.g. £1, which is deemed to have been received by the assignor (note that some form of consideration is required for the agreement to be an enforceable contract). The IP can, however, be transferred for valuable consideration or as part of an asset sale.

An IP assignment will also include warranties to confirm that the assignor is the owner of the intellectual property being transferred and that the assignor has the right to transfer the intellectual property. Transferring intellectual property without these assurances means that your company will have limited or no recourse should it transpire that the assignor did not own or have the right to transfer the intellectual property.

What are the common pitfalls of an Intellectual Property Assignment Agreement?

Where possible, it is important to clearly describe the IP being transferred. IP by its nature is not physical so failing to accurately describe the IP can result in disputes about what has been transferred. 

Further, there are several different types of IP (copyright, patents, trade marks and designs). Certain IP rights can also be registered. Depending on what is being transferred it may be necessary to take additional steps to perfect the transfer (for example notifying the appropriate register of the transfer). The agreement should include a requirement that the assignor takes the necessary steps to perfect the transfer and specify which party is required to pay any associated costs (such as registration fees).

In addition where copyright is being transferred, the assignor should also ensure that the assignor waives their moral rights (such as the right to attribution) in respect of the copyrighted work.

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Intellectual Property Assignment Agreement Template

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An Intellectual Property Assignment Agreement transfers ownership of any IP created by an employee to the employer. Make sure you have your employees sign this document prior to their start.

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Intellectual Property Agreement Template

Prepared by:

​ [Sender.FirstName] [Sender.LastName] [Sender.Company] ​

Prepared for:

​ [Employee.FirstName] [Employee.LastName] ​

​ [Employee.Company] ​

This Intellectual property agreement is entered into on (date) and will be effective from the same date, between [Sender.FirstName] [Sender.LastName] and [Employee.FirstName] [Employee.LastName] (Receiver).

­­As a condition of my employment with the Company, its subsidiaries, affiliates, successors or assigns (hereinafter, the “Company”), and in consideration of my employment with the Company and my receipt of the compensation now and hereafter paid to me by the Company, I agree to the following:

This Property Assignment Agreement will have the effect of transferring ownership in anything created by the employee during the period of his/her employment with the company. Intellectual Property Assignment Agreements are also entered into between business entities and even individuals, where one party is looking to sell the rights to its intellectual property in exchange for something of value — usually money.

​In an employer/employee Intellectual Property Assignment Agreement (which is what this agreement is), the employee may want to limit the intellectual property that would otherwise transfer to the employer. For example, the employee may not want to transfer anything conceived or created by him/her on his/her own time, especially if it does not relate to the employer’s business.

1. INVENTIONS RETAINED & LICENSED.

I have attached hereto, as Exhibit A, a list describing all inventions, original works of authorship, developments, improvements, and trade secrets which were made by me prior to my employment with the Company (collectively referred to as “Prior Inventions”), which belong to me, which relate to the Company’s proposed business, products or research and development, and which are not assigned to the Company hereunder; or, if no such list is attached, I represent that there are no such Prior Inventions.

If in the course of my employment with the Company, I incorporate into a Company product, process or machine a Prior Invention owned by me or in which I have an interest, the Company is hereby granted and shall have a nonexclusive, royalty-free, irrevocable, perpetual, worldwide license to make, have made, modify, use and sell such Prior Invention as part of or in connection with such product, process or machine.

At the time of joining the company, I was the owner of or held proprietary rights in relation to the intellectual property identified herein and related to the company’s business of (description of business), which Intellectual Property was developed in contemplation of being used, either directly or indirectly, by the Company in connection with carrying on the business of the Company.

2. ASSIGNMENT OF INVENTIONS.

I agree that I will promptly make full written disclosure to the Company, will hold in trust for the sole right and benefit of the Company, and hereby assign to the Company, or its designee, all my rights, title, and interest in and to any and all inventions, original works of authorship, developments, concepts, improvements, designs, discoveries, ideas, trademarks or trade secrets, whether or not patentable or registrable under copyright or similar laws, which I may solely or jointly conceive or develop or reduce to practice, or cause to be conceived or developed or reduced to practice, during the period of time I am in the employ of the Company (collectively referred to as “Inventions”), except as provided in “Exception to Assignments” below.

I further acknowledge that all original works of authorship which are made by me (solely or jointly with others) within the scope of and during the period of my employment with the Company and which are protectable by copyright are “works made for hire,” as that term is defined in the United States Copyright Act.

I understand and agree that the decision whether or not to commercialize or market any invention developed by me solely or jointly with others is within the Company's sole discretion and for the Company’s sole benefit and that no royalty will be due to me as a result of the Company’s efforts to commercialize or market any such invention.

3. REMAINDER OF INTELLECTUAL PROPERTY.

I hereby declare that I have assets, rights or interests that go beyond the scope of this agreement, and are not included as a part of this agreement, either in sum or whole. The benefit of such assets may not be used by [Employee.Company] , unless with my expressly stated written permission.

4. MAINTENANCE OF INVENTIONS RECORDS.

I agree to keep and maintain adequate and current written records of all Inventions made by me (solely or jointly with others) during the term of my employment with the Company. The records will be in the form of notes, sketches, drawings, and any other format that may be specified by the Company.

The records will be available to and remain the sole property of the Company at all times.

5. COSTS AND EXPENSES.

If either party incurs any costs, fees, expenses, etc., both parties will be liable to pay for costs and expenses, in full, unless if otherwise mentioned explicitly in this Agreement, any of the other Ancillary Agreements or any other agreement between parties. If any cost was borne by any person on the instance of completing a task for another person, the person who completed the task shall be reimbursed for the amount spent, as long as they can provide receipts.

6. PATENT & COPYRIGHT REGISTRATIONS.

I agree to assist the Company, or its designee, at the Company’s expense, in every proper way to secure the Company’s rights in the Inventions and any copyrights, patents, mask work rights or other intellectual property rights relating thereto, in any and all countries, including the disclosure to the Company of all pertinent information and data with respect thereto, the execution of all applications, specifications, oaths, assignments and all other instruments which the Company shall deem necessary in order to apply for and obtain such rights and in order to assign and convey to the Company, its successors, assigns, and nominees the sole and exclusive rights, title and interest in and to such Inventions, and any copyrights, patents, mask work rights or other intellectual property rights relating thereto.

I further agree that my obligation to execute or cause to be executed, when it is in my power to do so, any such instrument or papers shall continue after the termination of this Intellectual Property Assignment Agreement.

If the Company is unable because of my mental or physical incapacity or for any other reason to secure my signature to apply for or to pursue any application for any United States or foreign patents or copyright registrations covering Inventions or original works of authorship assigned to the Company as above, then I hereby irrevocably designate and appoint the Company and its duly authorized officers and agents as my agent and attorney in fact, to act for and in my behalf and stead to execute and file any such applications and to do all other lawfully permitted acts to further the prosecution and issuance of letters patent or copyright registrations thereon with the same legal force and effect as if executed by me.

7. COOPERATION.

I agree to perform all commercially reasonable acts deemed necessary or desirable by the Company to assist the Company, at the Company’s expense, in obtaining and enforcing the full benefits, enjoyment, rights and titles that come as a part of the Assigned IP. Such acts may include, but are not limited to, execution of documents and assistance or cooperation (i) in the filing, prosecution, registration, and memorialization of assignment of any applicable patents, copyrights, trademark, mask work, or other applications for my invention, (ii) in the enforcement of any applicable patents, copyrights, trademark, mask work, moral rights, trade secrets, or other proprietary rights, and (iii) in other legal proceedings related to the Assigned IP.

In the event that the Company is unable, for any reason, to secure my signature(s) to any document required to file, prosecute, register, or memorialize the assignment of any patent, copyright, trademark, mask work or other applications or to enforce any patent, copyright, mask work, moral right, trade secret or other proprietary right under any Assigned IP, I hereby irrevocably designate and appoint the Company and the Company’s duly authorized officers and agents as my agents and attorneys-in-fact to act for and on my behalf and instead of me, (i) to execute, file, prosecute, register and memorialize the assignment of any such application, (ii) to execute and file any documentation required for such enforcement, and (iii) to do all other lawfully permitted acts to further the filing, prosecution, registration, memorialization of assignment, issuance, and enforcement of patents, copyrights, mask works, moral rights, trade secrets or other rights under the Assigned IP, all with the same legal force and effect as if executed by me.

8. RETURNING COMPANY DOCUMENTS.

I agree that, at the time of leaving the employ of the Company, I will deliver to the Company (and will not keep in my possession, recreate or deliver to anyone else) any and all devices, records, data, notes, reports, proposals, lists, correspondence, specifications, drawings, blueprints, sketches, materials, equipment, other documents or property, or reproductions of any aforementioned items developed by me pursuant to my employment with the Company or otherwise belonging to the Company, its successors or assigns.

9. REPRESENTATIONS.

I agree to execute any proper oath or verify any proper document required to carry out the terms of this Agreement. I represent that my performance of all the terms of this Agreement will not breach any agreement to keep in confidence proprietary information acquired by me in confidence or in trust prior to my employment by the Company. I have not entered into, and I agree I will not enter into, any oral or written agreement in conflict herewith.

10. EQUITABLE REMEDIES.

I AGREE THAT IT WOULD BE IMPOSSIBLE OR INADEQUATE TO MEASURE AND CALCULATE THE COMPANY’S DAMAGES FROM ANY BREACH OF THE COVENANTS SET FORTH HEREIN.

ACCORDINGLY, I AGREE THAT IF I BREACH ANY OF SUCH PROVISIONS, THE COMPANY WILL HAVE AVAILABLE, IN ADDITION TO ANY OTHER RIGHT OR REMEDY AVAILABLE, THE RIGHT TO OBTAIN AN INJUNCTION FROM A COURT OF COMPETENT JURISDICTION RESTRAINING SUCH BREACH OR THREATENED BREACH AND TO SPECIFIC PERFORMANCE OF ANY SUCH PROVISION OF THIS AGREEMENT.

I FURTHER AGREE THAT NO BOND OR OTHER SECURITY SHALL BE REQUIRED IN OBTAINING SUCH EQUITABLE RELIEF AND I HEREBY CONSENT TO THE ISSUANCE OF SUCH INJUNCTION AND TO THE ORDERING OF SPECIFIC PERFORMANCE.

11. GOVERNING LAW.

This Agreement will be governed by the laws of the State of [Employee.State] . I hereby expressly consent to the personal jurisdiction of the state and federal courts with jurisdiction in [Employee.Country] [Employee.State] for any lawsuit filed there against me by the Company arising from or relating to this Agreement.

12. ENTIRE AGREEMENT.

This Intellectual Property Assignment Agreement sets forth the entire agreement and understanding between the Company and me relating to the subject matter herein and merges all prior discussions between us.

No modification of or amendment to this Agreement, nor any waiver of any rights under this agreement, will be effective unless in writing signed by the party to be charged.

Any subsequent change or changes in my duties, salary or compensation will not affect the validity or scope of this Agreement.

13. SEVERABILITY.

If one or more of the provisions in this Intellectual Property Assignment Agreement are deemed void by law, then the remaining provisions will continue in full force and effect.

14. SUCCESSORS & ASSIGNS.

This Agreement will be binding upon my heirs, executors, administrators and other legal representatives and will be for the benefit of the Company, its successors, and its assigns.

15. DISPUTES AND RESOLUTIONS.

Both parties agree that they will try to amicably settle any disputes amongst themselves, or with the help of a third party such as an agent. In case that they are unable to reach a settlement or do not wish to discuss the terms of the settlement with one another, they may approach a court of law situated in [Sender.Country] , [Sender.State] where applicable laws will come into motion.

AGREED AND ACCEPTED.

I ACKNOWLEDGE THAT I HAVE CAREFULLY READ THE FOREGOING INTELLECTUAL PROPERTY ASSIGNMENT AGREEMENT, I AM SATISFIED THAT I UNDERSTAND IT COMPLETELY, AND I AGREE TO BE BOUND BY ITS TERMS AND CONDITIONS.

​ [Sender.Company]

​ [Sender.FirstName] [Sender.LastName] ​

LIST OF PRIOR INVENTIONS AND ORIGINAL WORKS OF AUTHORSHIP­­­­­­

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Intellectual Property Assignment Agreement

During the formation of a new company a best practice is to assign all relevant intellectual property to the company using the following agreement. The consideration for the agreement is the sale of ownership to the individual assigning the intellectual property.

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IP Assignment and Licensing

IP rights have essentially transformed intangibles (knowledge, creativity) into valuable assets that you can put to strategic use in your business. You can do this by directly integrating the IP in the production or marketing of your products and services, thereby strengthening their competitiveness. With IP assignement and IP licensing, IP owners can also use your IP rights to create additional revenue streams by selling them out, giving others a permission to use them, and establishing joint ventures or other collaboration agreements with others who have complementary assets.

  Expert tip: Assignment, license and franchising agreements are flexible documents that can be adapted to the needs of the parties. Nevertheless, most countries establish specific requirements for these agreements, e.g. written form, registration with a national IP office or other authority, etc. For more information, consult your IP office .

IP rights assignment

You can sell your IP asset to another person or legal entity.

When all the exclusive rights to a patented invention, registered trademark, design or copyrighted work are transferred by the owner to another person or legal entity, it is said that an assignment of such rights has taken place.

Assignment is the sale of an IP asset. It means that you transfer ownership of an IP asset to another person or legal entity.

IP for Business Guides

Learn more about the commercialization of patents, trademarks, industrial designs, copyright.

Read IP for Business Guides

IP licensing

You can authorize someone else to use your IP, while maintaining your ownership, by granting a license in exchange for something of value, such as a monetary lump sum, recurrent payments (royalties), or a combination of these.

Licensing provides you with the valuable opportunity to expand into new markets, add revenue streams through royalties, develop partnerships etc.

If you own a patent, know-how, or other IP assets, but cannot or do not want to be involved in all the commercialization activities (e.g. technology development, manufacturing, market expansion, etc.) you can benefit from the licensing of your IP assets by relying on the capacity, know-how, and management expertise of your partner.

  Expert tip: Licensing can generally be sole, exclusive or non-exclusive, depending on whether the IP owner retains some rights, or on whether the IP rights can be licensed to one or multiple parties.

Technology licensing agreements

Trademark licensing agreements, copyright licensing agreements, franchising agreements, merchande licensing, joint venture agreements, find out more.

• Learn more about Technology Transfer .

Intellectual Property Assignment Agreement: Definition, Terms, Example

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ContractsCounsel has assisted 37 clients with intellectual property assignment agreements and maintains a network of 65 intellectual property lawyers available daily. These lawyers collectively have 5 reviews to help you choose the best lawyer for your needs. Customers rate lawyers for intellectual property assignment agreement matters 5.0 .

What is an Intellectual Property Assignment Agreement?

An intellectual property assignment agreement is a contract that transfers the intellectual property rights (For example, patents, trademarks, industrial designs, or copyrights) from the creator to another entity. The intellectual property rights holder may transfer all or part of their rights. The transfer of intellectual property rights is made upon a payment of a lump sum or royalties.

Employees hired for research and development roles or other technical areas sign intellectual property assignment agreements to assign to the company any ideas, work products, or inventions related to the company business that they may create during their employment.

Common Sections in Intellectual Property Assignment Agreements

Below is a list of common sections included in Intellectual Property Assignment Agreements. These sections are linked to the below sample agreement for you to explore.

Intellectual Property Assignment Agreement Sample

Reference : Security Exchange Commission - Edgar Database, EX-10.12 3 dex1012.htm FORM OF INTELLECTUAL PROPERTY ASSIGNMENT AGREEMENT , Viewed October 24, 2021, View Source on SEC .

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What Is an Intellectual Property Assignment Agreement?

An intellectual property assignment agreement is a legally binding contract that transfers ownership of intangible assets, such as patents, trademarks, copyrights, and trade secrets, from one party to another. This agreement establishes clear boundaries and legal clarity regarding the ownership and usage of intellectual property rights. A meticulously drafted assignment agreement offers numerous benefits, including clarity on ownership, enhanced legal protections, and streamlined dispute resolution mechanisms. By understanding the intricacies of intellectual property assignment agreements, parties can navigate complex transactions with confidence, securing a financial future and minimizing the risk of disputes and litigation .

Table of Contents

Purpose of an Assignment Agreement

Assigning intellectual property rights through an assignment agreement serves to legally transfer ownership and facilitate the smooth exchange of intangible assets between parties. This transfer can be vital in various business transactions, such as mergers and acquisitions, licensing agreements, and collaborations. The primary purpose of an assignment agreement is to establish clear boundaries and legal clarity regarding the ownership and usage of intellectual property rights.

Key Components of the Agreement

A thorough intellectual property assignment agreement typically comprises several fundamental elements that delineate the terms and scope of the intellectual property transfer. These components are pivotal in facilitating a seamless transfer of ownership and minimizing potential disputes.

One of the key components is the assignment scope, which outlines the specific intellectual property rights being transferred. This includes the type of intellectual property, such as patents, trademarks, or copyrights, as well as the geographical region in which the rights apply. The assignment scope should be clearly defined to avoid ambiguity and confirm that both parties understand the extent of the transfer.

Ownership clauses are another indispensable component of an intellectual property assignment agreement. These clauses establish the new owner's rights and responsibilities, including the right to use, modify, and license the assigned intellectual property. The ownership clauses should also address any existing licenses or agreements related to the intellectual property, facilitating a smooth transfer of ownership and minimizing potential disputes. By including these key components, an intellectual property assignment agreement can provide a clear and exhaustive framework for the transfer of intellectual property rights.

Types of Intellectual Property Assigned

The types of intellectual property assigned under an intellectual property assignment agreement can vary widely, spanning patents, trademarks, copyrights, trade secrets, and other forms of intangible assets. These intellectual property rights can include creative assets such as literary works, musical compositions, and artistic creations. Patent protections, including utility patents, design patents, and plant patents, can also be assigned. In addition, trade secrets, including confidential business information and proprietary knowledge, can be transferred under the agreement. Additionally, copyrights, including those related to software, databases, and other digital works, can be assigned. The agreement may also cover industrial property rights, such as industrial designs and geographical indications. The specific types of intellectual property assigned will depend on the nature of the transaction and the parties involved. By clearly defining the intellectual property rights being transferred, the assignment agreement guarantees that all parties are aware of their rights and obligations.

Benefits of a Comprehensive Agreement

A meticulously drafted intellectual property assignment agreement offers numerous benefits, including clarity on ownership, enhanced legal protections, and streamlined dispute resolution mechanisms. By establishing clear expectations, parties can avoid misunderstandings and guarantee a smooth transfer of intellectual property rights. This, in turn, fosters mutual trust and cooperation, vital for a successful collaboration. A detailed agreement also provides a clear understanding of the rights and obligations of each party, minimizing the risk of disputes and litigation. In addition, it enables parties to address potential issues proactively, reducing the likelihood of costly and time-consuming disputes. With a well-crafted agreement in place, parties can concentrate on their core objectives, secure in the knowledge that their intellectual property rights are protected. By providing a clear framework for the transfer of intellectual property rights, a detailed agreement promotes confidence, stability, and predictability, ultimately leading to more successful collaborations and business relationships.

Risks of Not Having an Agreement

In the absence of a thorough intellectual property assignment agreement, parties risk forfeiting valuable rights and facing unforeseen consequences. Without a clear understanding of ownership and usage rights, parties may inadvertently relinquish control over their intellectual property, leading to potential infringement and litigation. Additionally, failure to establish a formal agreement can lead to financial losses and reputational damage.

Loss of IP Rights

Frequently, failure to establish clear intellectual property rights through a formal agreement can lead to unintended and irreversible consequences, including loss of IP ownership and control. This can culminate in abandoned innovation, where valuable ideas and creations are left unprotected and open to exploitation by others. Without a formal agreement, creators and inventors risk expropriation, where their intellectual property is taken and used without their consent or compensation.

In the absence of a clear assignment agreement, intellectual property rights can be lost or compromised, leaving creators vulnerable to unauthorized use, reproduction, and distribution of their work. This can lead to a loss of revenue, reputation, and competitive advantage. Furthermore, the lack of a formal agreement can create uncertainty and ambiguity, making it challenging to resolve disputes or negotiate licensing agreements.

To avoid these risks, it is crucial to establish a clear and detailed intellectual property assignment agreement that defines the terms of ownership, use, and exploitation of intellectual property. By doing so, creators and innovators can safeguard their valuable assets and guarantee that their intellectual property rights are respected and enforced.

Infringement and Litigation

Without a thorough intellectual property assignment agreement, creators and innovators expose themselves to the risks of infringement and litigation, where unauthorized use of their intellectual property can lead to costly legal battles and reputational damage.

Infringement and litigation risks can manifest in various ways, including:

Financial Consequences

Failure to establish a thorough intellectual property assignment agreement can lead to substantial financial losses, including legal fees, damages, and lost revenue. Without a clear agreement, parties may be exposed to unforeseen financial burdens, which can be detrimental to a business's financial health.

Some of the financial consequences of not having an intellectual property assignment agreement include:

• Unanticipated tax implications, such as unexpected tax liabilities or lost deductions
• Increased legal fees associated with disputes or litigation
• Loss of revenue due to unauthorized use or misappropriation of intellectual property

In the absence of a comprehensive agreement, parties may be forced to allocate significant resources to resolve disputes, which can divert attention and funds away from core business activities. Furthermore, the financial consequences of not having an agreement can have long-term effects on a business's financial stability and growth prospects. It is essential to prioritize the establishment of a thorough intellectual property assignment agreement to mitigate these risks and ensure a secure financial future.

Negotiating the Terms of Transfer

During the negotiation process, it is vital to carefully consider the terms of transfer to secure that the intellectual property rights are assigned in a manner that aligns with the parties' interests and objectives. This phase is pivotal in verifying that the rights are transferred effectively, and the parties' expectations are met.

Set Boundaries: A key aspect of negotiating the terms of transfer is to establish clear boundaries and define the scope of the intellectual property rights being assigned. This includes specifying the type of intellectual property, the territory where the rights will be exercised, and the duration of the assignment. By setting these boundaries, parties can avoid potential disputes and confirm a smooth transfer process.

Define Expectations: It is imperative to define the expectations of both parties regarding the assignment. This includes outlining the responsibilities of each party, the payment terms, and the consequences of non-compliance. By defining these expectations, parties can confirm that they are on the same page and that the assignment is carried out as intended. A well-negotiated agreement can prevent potential conflicts and confirm a successful transfer of intellectual property rights.

Enforcing the Assignment Agreement

Once the terms of the intellectual property assignment agreement have been negotiated and finalized, the next step is to guarantee that the agreement is properly enforced to protect the interests of all parties involved. This is crucial to ensure that the intellectual property rights are transferred correctly and that all obligations are fulfilled.

To ensure effective enforcement, parties should be aware of potential issues that may arise, including:

• Contract Breaches : One or both parties may fail to fulfill their obligations, which can lead to disputes and legal action.
• Jurisdictional Issues : Disputes may arise due to conflicting laws or regulations in different jurisdictions, making it essential to define the governing law and dispute resolution mechanisms in the agreement.
• Dispute Resolution Mechanisms : Establishing clear procedures for resolving disputes, such as arbitration or mediation, can help prevent costly and time-consuming litigation.

Frequently Asked Questions

Can an assignment agreement be verbal or must it be written?.

While oral contracts are legally binding, it is highly advisable to have a written intellectual property assignment agreement, providing written proof of the terms and minimizing potential disputes, as verbal agreements can be difficult to enforce.

Are There Jurisdictional Differences in Assignment Agreement Laws?

Jurisdictional differences in assignment agreement laws exist, particularly in cross-border issues, with regional variations in contractual requirements, formalities, and statutory provisions governing intellectual property rights, necessitating careful consideration of local laws and regulations.

Can Intellectual Property Be Assigned to Multiple Parties Simultaneously?

Yes, intellectual property can be assigned to multiple parties simultaneously, leading to joint ownership and shared rights, where each co-owner holds an undivided interest in the IP, with corresponding rights and obligations.

Is an Assignment Agreement the Same as a Non-Disclosure Agreement?

No, an assignment agreement and a non-disclosure agreement are distinct, with contractual differences and legal implications. The former transfers intellectual property rights, while the latter protects confidential information, each serving unique purposes in safeguarding intellectual property.

Can an Assignment Agreement Be Terminated or Cancelled?

A well-drafted assignment agreement can be terminated or cancelled upon mutual agreement or due to material breach, with consequences outlined in the contract, while contractual loopholes may provide avenues for termination or renegotiation.

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Sample IP Assignment Agreement

This is a sample intellectual property assignment agreement, under which a company assigns the rights, title, and interest in and to trademarks, patents, domain names and intangible assets to another company, in connection with a corporate acquisition. This sample includes a choice of New York law.

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Essential Guide: Using Confidentiality & IP Assignment Agreements

LegalGPS : Jul 26, 2024 9:38:00 AM

As an entrepreneur, one of your most valuable assets is your company's intellectual property (IP). From trade secrets and customer lists to patented inventions and copyrighted materials, your IP is what sets you apart from your competitors and drives your business forward. That's why it's crucial to take the necessary steps to protect this critical asset, and one effective way to do this is by implementing a confidentiality and intellectual property assignment agreement.

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Confidentiality and IP Assignment Agreement

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In this blog post, we'll dive into the world of confidentiality and IP assignment agreements in a friendly and approachable manner, breaking down complex legal topics into simple, actionable steps. We'll explain their importance, outline their key elements, discuss the benefits of implementing them, provide guidance on how to draft one, and highlight common mistakes to avoid. By the end, you'll understand why these agreements are an essential tool for securing your business's intellectual property and be equipped with the knowledge you need to create one tailored to your business.

Imagine sitting down for a coffee chat with a friend, and they're curious about what a confidentiality and IP assignment agreement is, and why it's important for a business. You could explain that protecting a company's intellectual property is essential for its success and longevity. Confidentiality and IP assignment agreements are an effective way to safeguard valuable assets and ensure the business retains control over its IP.

Now, let's delve deeper into the world of confidentiality and IP assignment agreements.

What is a Confidentiality and IP Assignment Agreement?

A confidentiality and intellectual property assignment agreement is a legally binding contract between two or more parties that addresses the protection, disclosure, and sharing of confidential information and the assignment of intellectual property rights. It's designed to safeguard the sensitive information of a business while also ensuring that any intellectual property created by an individual or entity involved with the company is assigned to the company itself.

These agreements differ from other IP protection methods, such as patents and trademarks, in that they specifically address the assignment of IP ownership and provide clear terms for the management of confidential information.

Key Elements of a Confidentiality and IP Assignment Agreement

When crafting a confidentiality and IP assignment agreement, these are the essential elements to include:

Parties Involved

Clearly identify the parties entering into the agreement. This typically includes the company and the individual or entity being hired (e.g., an employee, contractor, consultant, or partner). Be sure to use accurate and complete names, as well as any relevant titles, to avoid any confusion or disputes.

Scope of Confidential Information

Define the scope of the confidential information that is subject to the agreement. This could involve trade secrets, financial data, customer lists, marketing strategies, and any other sensitive information that the business wishes to protect.

Ownership and Assignment of Intellectual Property

Specify the terms of the intellectual property assignment. This involves stating that any IP created, developed, or conceived by an individual or entity within the scope of their relationship with the company will be assigned to the company. The agreement should also mention any exceptions or conditions that apply.

Non-Disclosure Terms

Establish clear guidelines for the treatment and handling of confidential information. This includes prohibiting the unauthorized use and disclosure of protected information, as well as outlining any restrictions on accessing the information. It's essential to include obligations and expectations for maintaining the confidentiality of the information, even after the agreement's termination.

Duration and Termination

Indicate the duration of the agreement, which could be for a set period or ongoing until terminated by either party. Include any provisions for termination, such as notice requirements or specific events that could trigger termination (e.g., breach of contract, completion of a project).

Remedies for Breach

Outline the remedies available to the aggrieved party should the other party breach the agreement. This may include monetary damages, injunctive relief, or other legal remedies.

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Benefits of Implementing a Confidentiality and IP Assignment Agreement

By incorporating a confidentiality and intellectual property assignment agreement into your company's legal arsenal, you can enjoy several key benefits:

Protection of Sensitive Business Information

Your company's competitive advantage relies on the careful protection of its sensitive information. These agreements help ensure that confidential information is treated with care and not disseminated or exploited by unauthorized parties.

Assurance of IP Ownership

By clearly stipulating that any IP created or developed in the scope of the relationship is assigned to the company, you provide a solid legal foundation for your business's ownership claims to all valuable assets.

Attraction of Investors and Partners

A strong confidentiality and IP assignment agreement demonstrates your company's commitment to safeguarding its intellectual property. This can make your business more attractive to potential investors, partners, or clients who are seeking assurance that their information and contributions will be treated with care.

Mitigation of Legal Disputes and Risks

Establishing clear guidelines and expectations around the treatment of confidential information and the assignment of IP rights can help prevent future misunderstandings and disputes while reducing the risk of costly litigation.

How to Draft a Confidentiality and IP Assignment Agreement: A Detailed Walkthrough

Crafting a robust confidentiality and IP assignment agreement may seem daunting, especially when your most valuable assets are at stake. But fear not - we're here to guide you through the process step-by-step, making it as straightforward and actionable as possible. By the end of this section, you'll be well-equipped to develop an agreement that fits your unique business needs.

Step 1: Identify Your Needs and Objectives

The first step is to clearly define the goals of your agreement. Ask yourself:

What types of confidential information do I need to protect (e.g., trade secrets, financial data, customer lists)?

What intellectual property needs assigning (e.g., patents, copyrights, trademarks)?

Who will be bound by the agreement (e.g., employees, contractors, partners)?

As you're determining your objectives, make sure to consider the scope and nature of the relationship between the parties involved. This will vary depending on whether the individual is an employee, a contractor, a partner, or another entity related to your business.

Step 2: Consult with Legal Counsel

Once you've identified your needs and objectives, it's time to seek legal guidance. Consulting with a legal professional is essential to ensure your agreement adheres to all legal standards and offers comprehensive protection for your intellectual property. They can provide valuable input and advice to help tailor the agreement to your particular circumstances.

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Step 3: Craft the Agreement

After consulting with legal counsel, you can begin to draft your agreement. Here, remember to use precise and easy-to-understand language and to make your terms as explicit as possible. Let's further break down what you need to include:

Identify the Parties Involved: Spell out the full legal names of both the disclosing party (your business) and the receiving party (the individual or entity obliged to keep your information confidential). Often, a business will adopt a ‘catch-all’ approach by covering all directors, employees, agents, and contractors under the same agreement.

Define the Confidential Information: Make sure to clearly define what constitutes confidential information within the scope of your agreement. Keep the definition broad enough to cover all relevant details, but not so broad that it's unenforceable. Be as specific as you can be here. Typical categories include: business strategies, customer databases, financial data, unpublished patent applications, technical designs, and prototype details.

Establish the Term of the Agreement: Specify the duration of your agreement, as well as any conditions for its termination.

Specify IP Ownership: The assignment clause should state that any intellectual property created, developed, or conceived by the receiving party while in service to your company will be assigned to the company.

Set Out Non-Disclosure Obligations: Lay out clearly what is expected of the receiving party when it comes to handling your confidential information.

Outline Consequences for Breach: Define remedies for the breach of the agreement, typically an injunction and/or monetary damages.

Step 4: Review and Amend as Necessary

The work doesn't stop after you've drafted your agreement. It's important to review and revise the document regularly to ensure it continues to align with your changing business needs and updated laws.

Don't worry if the agreement doesn't come out perfectly the first time. It often takes multiple iterations to draft a document that accomplishes everything you need. The key is to keep refining it until you're confident it protects your company's best interests.

Use these steps as your roadmap to drafting an effective confidentiality and IP assignment agreement. Always make sure to consult with legal counsel to ensure your agreement's terms comply with current laws and are legally enforceable. Empowered with this knowledge, you're now equipped to safeguard your company's most valuable assets.

Common Mistakes to Avoid

As you put together your confidentiality and IP assignment agreement, be mindful of these common mistakes:

Ambiguous language: Keep the language of your agreement clear and concise to avoid confusion or misinterpretation.

Overly broad or narrow scope: A well-crafted agreement will strike a balance between protecting your business's interests without being overly restrictive or impeding the free flow of creativity and collaboration.

Failure to specify IP assignment terms: Clearly outline the terms of ownership, transfer, and assignment of intellectual property to prevent ambiguity and future disputes.

Inadequate remedy clauses: Ensure your agreement includes fair and appropriate remedies for breaches of contract to deter unauthorized actions effectively and offer recourse should violations occur.

Confidentiality and intellectual property assignment agreements play a vital role in protecting a company's precious assets. By understanding their importance and crafting a thorough, legally sound agreement, you can safeguard your business's valuable IP and maintain a competitive edge in the marketplace.

Use the knowledge you've gained from this guide to create a customized confidentiality and IP assignment agreement that meets your company's unique needs. Remember that consulting with legal counsel is essential to ensure that your agreement is enforceable and provides the best possible protection for your business. Good luck, and happy drafting!

Check out our customizable contract template to create your own Confidentiality and Intellectual Property Assignment Agreement and protect your business today!

Get Legal GPS's Confidentiality and Intellectual Property Assignment Agreement Template Now

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Table of Contents

Benefits of a Confidentiality and IP Assignment Agreement

How to Draft a Confidentiality and IP Assignment Agreement

Intellectual Property Assignment Agreements: The Ultimate Business Guide

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Let’s dive into one of the lesser unknown but smarter moves you can make for your business: Trademark Assignments. If you haven’t heard of them or...

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Contracts and IP ownership

For most companies — especially small businesses, startups, and partnerships — intellectual property (IP) is either the crown jewel of the business or a key asset. For in-house counsel, this means that extra care is needed when preparing any contract that touches on IP ownership. While it seems scary, the basic concepts of IP ownership are relatively straightforward and there is much in-house counsel can do without always resorting to the use of outside counsel — if that’s even an option.

There are, however, certainly times when experienced IP counsel is helpful and necessary. With Practical Law, however, you can learn the basics of IP and IP ownership and have access to a huge library of contract templates, clauses, checklists, practice notes, drafting notes, and toolkits. And, all for far less than the cost of outsourcing all of your intellectual property contracts issues to outside counsel.

What is intellectual property and IP ownership?

There are four types of IP that in-house counsel are concerned about when drafting or reviewing agreements:

• Trade secrets

When preparing or reviewing a contract involving IP ownership, the parties are generally trying to set out the key issues — namely, “who owns what” (ownership) and “how can the IP be used” (license). More about these concepts is laid out below, but without a contract in place stating otherwise, here are the general rules for IP ownership.

Copyrights, or original works of art, are owned by the author who created the work; if multiple authors are involved, they are joint owners with an indivisible interest in the work. Patents — also known as inventions — are owned by the inventor. Trademarks are the marks used in commerce and are owned by the person or business using them to identify their goods or services. Trade secrets, also known as confidential information, are owned by the creator — mostly businesses through their employees. With trade secrets, care must be taken to keep them confidential or they lose their status as trade secrets.

IP contracts establish ownership

Of course, it’s pretty rare that a lawyer will rely on things just working themselves out based on the common law. Instead  and rightfully so, they want to lay out IP ownership in a written agreement that spells out the rights and obligations of each party. This is where the hundreds of IP contract templates in Practical Law can really cut your time, effort, and cost way down. To start, you need to get familiar with the three types of intellectual property agreements: the creation of IP, the licensing of IP, and the purchase/assignment of IP.

How to create intellectual property

You can create intellectual property in a number of ways. For the purposes of most businesses, IP is created by its employees or by third parties, such as contractors hired to create IP based on specifications and direction provided by the business. While businesses own IP created by their employees — if it is part of their job to create such IP — it is not wise to leave ownership to chance.

The typical solution is an invention assignment agreement signed by the employee when they first join the company. Such an agreement covers a range of IP ownership issues, from confidentiality of company trade secrets to the assignment of any intellectual property created on the job or using company resources to the company. These agreements also require employees to disclose any inventions they claim to have invented prior to joining the company so there is no dispute down the road.

When it comes to contractors, their agreements usually contain a “work-for-hire” provision which states that any work product they turn out for the company under the contract belongs to the company. The only exceptions involve IP the contractor brings to the relationship. It continues to belong to the contractor but, if necessary, the contractor provides a license for the company to use that IP to make the work product function properly. These agreements also contain confidentiality and non-disclosure provisions to ensure that neither party reveals the confidential information of the other party.

See the Practical Law practice note  Intellectual Property – Employees and Independent Contractors

Lastly, companies sometimes partner and enter into a joint development agreement to create IP that neither party could easily create on their own. Each party contributes something to the development and then the ownership and use rights are spelled out in the terms of the agreement.

How to license the IP

IP ownership also comes up in the context of licensing the IP. Many companies’ entire business comprises licensing software or other IP they have developed. To do this successfully, they must enter into software/IP licensing agreements with customers. These agreements set out, among other things:

• Ownership of the IP and any modifications or derivatives
• Who may use the licensed IP, in what manner, and is there exclusivity?
• The ability to sublicense
• Where the IP may be used
• The period of time the licensee may use the IP
• Warranties about the software
• Indemnities, primarily from the licensor against IP infringement
• Obligations not to reverse engineer the software or allow unauthorized access
• Permitted uses and prohibited uses of the IP
• How the agreement ends and what happens to the licensee’s ability to use the IP after termination

While software agreements are the obvious IP licensing contracts, intellectual property licensing arises in franchise agreements; entertainment such as movies, music, and art; NFT; and many other contexts. That is, any type of IP is subject to a licensing agreement.

How to purchase or assign intellectual property

Lastly, IP ownership can be purchased or assigned — that is, the inventor or owner of the IP can transfer it to a new owner. Note that the assignment of IP is different than licensing IP. Under an assignment, ownership and all rights are transferred. With a license , there is no transfer of ownership and only limited rights to use the IP are given.

Some common situations involving buying IP include mergers and acquisitions of the company that owns the IP or just a straightforward purchase of the IP asset alone. For example, owners can sell copyrights and trademarks, including web addresses — many so-called patent trolls buy patents out of the bankruptcy estate of a failed business. Here are three things to keep in mind when buying IP:

•   Define the IP properly. What, exactly, are you buying or selling? Words will matter here.
• Representations and warranties. Drafting properly is important, especially representations around ownership of the IP being sold, warranties around non-infringement, and an indemnity if something goes wrong.
• Residual use. Does the seller have any rights to continue to use the IP? If so, what is the scope? What is the price?

Assignment of IP typically takes place when a party is contributing their IP to a joint venture or partnership , or when the founder of a technology business transfers their invention to the new business, which is generally a requirement to attract new investors. Intellectual property may be transferred to satisfy debts or a judgment, or when a subsidiary or division is “spun out” of a parent company and provided with certain IP assets to start their separate business. When assigning IP, consider these three key points in addition to those above:

• Broad assignment rights. Define what is being assigned and ensure you are getting what you think you are getting.
• Power of attorney. Generally, there will be an obligation on the part of the assignor to cooperate in taking any steps necessary to perfect the assigned rights. A power of attorney gives the assignee the ability to perfect those rights even without the assignor’s assistance.
• Dissolution . If the company folds or the joint venture fails, what happens to the IP that was contributed? You need to think this through at the beginning as it is too late to think about it when the problem hits.

Given the importance of IP to businesses — especially small business and partnerships — in-house counsel should be well versed in the contracts that govern its ownership, assignment, and licensing. It may seem daunting at first, but it is a skill you can hone relatively quickly, especially with a resource like Practical Law to back you up.

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